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Singapore home prices rebound, while record rents ease slightly

arifnsn October 27, 2023

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Singapore home prices rebounded more than expected in the third quarter, a sign of how resilient the market remains despite government intervention and fragile economic conditions.

Private home valuations rose by 0.8 per cent from the previous three months, reversing its first drop in three years, according to data released by the Urban Redevelopment Authority (URA) on Friday. An initial estimate had prices rising 0.5 per cent.

The city state’s real estate boom has so far dodged the downturns seen in other major cities, where slowing economic growth and rising interest rates have weakened demand. This has prompted major curbs to cool the hot market, in contrast to rival financial hub Hong Kong, which cut housing taxes this week to boost its ailing property sector.

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Singapore government doubles residential property tax for foreigners to 60 per cent

Home sales have fallen in recent months – albeit during a quiet period for major new projects – reaching their lowest level this year in September. With at least 10 private residential projects in the pipeline for the fourth quarter, developers are likely to be more cautious on pricing amid softening land valuations, wrote Citigroup Inc. analyst Brandon Lee in a note this month.

Still, with locals continuing to chafe at the affordability of homes, authorities have shown little signs of moving away from the curbs, which included the doubling of taxes on property purchases for foreigners to 60 per cent in April.

Meanwhile, Singapore’s record rents, which have also been a significant pain point for expats and locals alike, are also showing further sign of easing. An index of rents for private homes published by the URA rose 0.8 per cent from the second quarter, when it gained 2.8 per cent. That is the slowest increase since the last quarter of 2020.